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Q4 Earnings Rundown: Adobe (NASDAQ:ADBE) Vs Other Vertical Software Stocks


Radek Strnad /
2022/04/07 9:17 am EDT
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As we reflect back on the just completed Q4 vertical software sector earnings season, we dig into the relative performance of Adobe (NASDAQ:ADBE) and its peers.

Software is eating the world, and while a large number of solutions such as project management or video conferencing software can be useful to a wide array of industries, there are industries that have very specific needs. Whether it is life-sciences, education or banking, the demand for so called vertical software, addressing industry specific workflows, is growing, fueled by the pressures on improving productivity and quality of offerings.

The 12 vertical software stocks we track reported a mixed Q4; on average, revenues beat analyst consensus estimates by 4.86%, while on average next quarter revenue guidance was 2.18% above consensus. The whole tech sector has been facing a sell-off since late last year and while some of the vertical software stocks have fared somewhat better, they have not been spared, with share price declining 12.6% since earnings, on average.

Adobe (NASDAQ:ADBE)

One of the most well-known Silicon Valley software companies around, Adobe (NASDAQ:ADBE) is a leading provider of software as service in the digital design and document management space.

Adobe reported revenues of $4.26 billion, up 9.14% year on year, in line with analyst expectations. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a slow revenue growth.

“Adobe achieved record Q1 revenue as Creative Cloud, Document Cloud and Experience Cloud continue to be pivotal in driving the digital economy,” said Shantanu Narayen, chairman and CEO, Adobe.

Adobe Total Revenue

Adobe delivered the slowest revenue growth of the whole group. The stock is down 4.2% since the results and currently trades at $447.17.

Is now the time to buy Adobe? Access our full analysis of the earnings results here, it's free.

Best Q4: Doximity (NYSE:DOCS)

Founded in 2010 and named for a combination of “docs” and “proximity”, Doximity (NYSE: DOCS) is the leading professional network for U.S. medical professionals.

Doximity reported revenues of $97.8 million, up 66.7% year on year, beating analyst expectations by 13.4%. It was a very strong quarter for the company, with an impressive beat of analyst estimates and an exceptional revenue growth.

Doximity Total Revenue

The stock is up 3.41% since the results and currently trades at $51.50.

Is now the time to buy Doximity? Access our full analysis of the earnings results here, it's free.

Weakest Q4: 2U (NASDAQ:TWOU)

Originally named 2tor after the founder's dog Tor, 2U (NASDAQ:TWOU) provides software for universities and colleges to deliver online degree programs and courses.

2U reported revenues of $243.6 million, up 13.1% year on year, in line with analyst expectations. It was a weak quarter for the company, with a full-year guidance missing analysts' expectations.

2U had the weakest full year guidance update in the group. The stock is down 30.1% since the results and currently trades at $12.54.

Read our full analysis of 2U's results here.

nCino (NASDAQ:NCNO)

Founded in 2011 in North Carolina, nCino (NASDAQ:NCNO) makes cloud-based operating systems for banks and provides that software as a service.

nCino reported revenues of $74.9 million, up 32.4% year on year, beating analyst expectations by 8.14%. It was a very strong quarter for the company, with a very optimistic guidance for the next quarter.

nCino achieved the highest full year guidance raise among the peers. The stock is up 9.02% since the results and currently trades at $44.68.

Read our full, actionable report on nCino here, it's free.

Autodesk (NASDAQ:ADSK)

Founded in 1982 by John Walker and growing into one of the industry's behemoths, Autodesk (NASDAQ:ADSK) makes computer-aided design (CAD) software for engineering, construction, and architecture companies.

Autodesk reported revenues of $1.21 billion, up 16.5% year on year, beating analyst expectations by 1.31%. It was a weaker quarter for the company, with the guidance for both the next quarter and the full year below analyst estimates.

The stock is down 5.55% since the results and currently trades at $206.

Read our full, actionable report on Autodesk here, it's free.

The author has no position in any of the stocks mentioned